1- Using the table below to answer the questions.

Part 1 of 2. In a couple of sentences explain what is the most important conversation you need to have before proceeding with this project?

Part 2 of 2. Would this conversation be with the finance people or the marketing people?

Table of Net Present Values given different Scenarios:

Different Scenarios		Project cost of capital
		6%	8%	10%
Ability to cross sale existing customers	Yes	$ 2,000,000	$ 1,250,000	$ 100,000
Ability to cross sale existing customers	No	$ 1,000,000	$ 500,000	$ (500,000)

2- When you spend more upfront (at the acquisition stage) and less in the operating stage (in variable costs) are you increasing the risk of the project, or decreasing the risk of the project? Are you increasing or decreasing the net present value breakeven point?